About the Industry - An Overview

8/12/2019 About the Industry - An Overview

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Rubber IndustryAn Overview

Automotive Industry, globally, as well in India, is one of

the key sectors of the economy. The Indian Automotive

Industry comprising of the automobile and the auto

component sectors has recorded considerable growth

following the delicensing and opening up of the sector

to FDI in 1993. The unbundling of this industry from restrictive environment has, on the one hand,

helped in restructuring, absorbing new technologies, align itself to the global developments and realise

its potential with significant increase in industrys contribution to overall industrial growth in the country.

Due to its deep forward and backward linkages with several key segments of the economy, automotive

industry has a strong multiplier effect and acts as one of the drivers of economic growth. The well-

developed Indian automotive industry produces a wide variety of vehicles: passenger cars, light,

medium and heavy commercial vehicles, multi-utility vehicles such as jeeps, scooters, motor-cycles,

mopeds, three wheelers, tractors and other agricultural equipments etc.

It is envisaged that the opportunity landscape for the Indian auto industry would encompass

manufacture of vehicles and components for domestic sales and for exports. India would continue to

enjoy its eminent position of being the largest tractor and three wheeler manufacturer in the world and

the worlds second largest two wheeler manufacturer and would emerge as the worlds eighth/ninth

largest car producer and would retain 4th largest position in world truck manufacturing sector. Further,

by the end of decade, the automotive sector is likely to double its contribution to the countrys GDP

from current levels of 5% to 10%. It is estimated that the automotive sector requires an incremental

investment of Rs 11,000 - 12,000 crores per annum to realise its full growth potential.

Indian Auto Component industry is quite comprehensive with

around 500 firms in Autothe organised sectorproducing practically all parts and more than 10,000componentfirms in small unorganised sector !he auto component sector hasbeen one of

Industrythe fastest growing segments of auto industry !he industry, overthe years,developed the capability of manufacturing all components required to manufacture vehicles, which is

evident from the high levels of indigenisation achieved in the

vehicle industry as well as the components developed for the completely Indian made vehicles

"ver the last few years the Indian Auto Component Industry has created a robust capacity base and world#sall ma$or manufacturers have set up their manufacturing unit in the country Indian auto componentmanufacturing, currently constrained by lac% of large capacities, is slowly but steadily wor%ing on e&pandingcapacities and automation levels !he Indian auto component industry is targeting for a bigger share of thee&port mar%et and is in the process of ramping up its manufacturing capabilities to meet the capacity andquality requirements !he auto component industry in India is e&pected to grow fourfold from the currentlevels of '()*+ billion to over '()

110 billion by the year *0*0 and it would require an average investment of '() 5 billion per annum

AutomotiveIndustry


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Rubber-' . RubberIndustry (tatics


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IndianRubber Industry

(a!istics(ince the establishment of thefirst rubber goodsmanufacturing unit in 1/*1 atol%ata, the Indian rubberindustry has maintained itsforward march, particularly

during the post.independence period It has achieved overall e&pansion through increase in the range ofproducts manufactured, in the number of units, in technological sophistication and self.sufficiency esidescatering to the entire domestic demand, the industry is brea%ing new barriers on the e&port front It pro$ectstremendous growth in the *1st century !he factors responsible for this phenomenal e&pansion are vastinternal mar%et, rapid industrialisation, on.going economic reforms, and improved living standards of themasses

India is the fourth largest producer of natural rubber and second largest consumer of natural rubber2 and fifthlargest consumer of natural rubber and synthetic rubber together in the world India is the world#s largestmanufacturer of reclaim rubber India is first in productivity of natural rubber !he per capita consumption ofrubber in India is only //0 gms against / to 1+ %ilos in 3apan, '(A and 4urope !his envisages tremendousgrowth prospects of the industry in the years to come

ith around +000 units comprising 0 large scale, 00 medium scale and around 5+60 ((I 7 tiny sectorunits, manufacturing 5000 rubber products, employing directly -00 hundred thousand people, includingaround **000 technically qualified support personnel !he Indian Rubber Industry plays a core sector role inthe Indian national economy !he industry has certain distinct advantages li%e . an e&tensive plantationsector2 indigenous availability of the basic raw materials, li%e natural rubber, synthetic rubber, reclaim rubber,carbon blac%, rubber chemicals, fatty acids, rayon, and nylon yarn and so on2 large domestic mar%et2availability of cheap labour2 training facility in various technical institutes2 improved living standards of themasses All these ground support help the Indian rubber industry to poise for an all round development and aquantum $ump in production and technology up gradation in near future

!he wide range of rubber products manufactured by the Indian rubber industry comprises all types of heavy

duty earth moving tyres, auto tyres, tubes, automobile parts, footwear, beltings, hoses, cycle tyres and tubes,cables and wires, camelbac%, battery bo&es, late& products, pharmaceutical goods, besides moulded ande&truded goods for mass consumption !he products manufactured also cover hi.tech industrial items !heimportant areas which the industry caters to include all the three wings of defence, civil, aviation,aeronautics, railways, agriculture, transport as also te&tiles, engineering industries, pharmaceuticals, mines,steel plants, ports, family planning programmes, hospitals, sports, ie practically to every conceivable field

India rubber industry is basically divided into two sectors . tyre and non.tyre !he tyre sector produces alltypes of auto tyres, conventional as well as radial tyres and e&ports to advanced countries li%e '(A, 4' etc!he non.tyre sector comprises the large, medium scale, small scale and tiny units It produces hightechnology and sophisticated industrial products !he small.scale sector accounts for over 508 of production

of rubber goods in the non.tyre sector !he Indian rubber products have been e&ported to around 1/0countries in the world including '(A, Russia, ', angladesh, Italy, 9epal, :ermany, "man, ;rance, (audiArabia, 'A4, African countries etc and e&ports have gone up manifold

!he yardstic% to measure the growth rate of the industry is rubber consumption esides yearly consumptionof rubbers . natural, synthetic and reclaim, there are other raw materials li%e carbon blac%, rubber chemicals,tyre cords, plastici


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(a!istics

Natural Rubber is produced from the crop harvested from rubber

plantations both in the latex form as well as in the field coagulam

form. Latex is a milky white dispersion of rubber in water and

field coagulam is the auto coagulated latex on the tapping panel

(tree lace) and the collection cups (shell scrap and cuplumps).

Both the latex and field coagulam harvested from rubber

plantations being highly susceptible to degradation by

contamination on keeping, have to be processed into marketable

forms that will allow safe storage and marketing. The most

important forms in which natural rubber is processed and

marketed are Sheets (RSS1 to RSS5), Crepes (Pale Latex

Crepes; Estae Brown Crepes; Thin Brown Crepes; Thick Blanket Crepes; Flat Bark Crepes; Pure

Smoked Blanket crepe), Block rubber, Technically specified (SMR, SIR, STR, ISNR), Preserved latex

concentrates. Among these forms/types, the first three are in the dry form and almost 90% of the total

natural rubber produced in the world is at present marketed in these 3 forms. Sheet rubber and block

rubber are the dominant types of dry natural rubber available in the world market and this dominance

reduced the number of grades used in any volume to the 10-15 within these types.

In 1/0/, a team headed by ;rit< =ofmann, wor%ing at the

ayer laboratory in 4lberfeld, :ermany, succeeded in

polymeri


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ISO Code Technical Name- Common Names

BIIR Bromo Isobutylene Isoprene - Bromobutyl

BR Polybutadiene

CIIR Chloro Isobutylene Isoprene - Chlorobutyl, Butyl

CR Polychloroprene - Chloroprene, Neoprene

CSM Chlorosulphonated Polyethylene - Hypalon

ECO Epichlorohydrin - ECO, Epichlorohydrin, Epichlore, EpichloridrineEP Ethylene Propylene

EPDM Ethylene Propylene Diene Monomer - EPDM, Nordel

FKM Fluoronated Hydrocarbon - Viton, Kalrez, Fluorel

FVQM Fluoro Silicone - FVQM

HNBR Hydrogenated Nitrile Butadiene - HNBR

IR Polyisoprene - (Synthetic) Natural Rubber

IIR Isobutylene Isoprene Butyl - Butyl

MVQ Methyl Vinyl Silicone - Silicone Rubber

NBR Acrylonitrile Butadiene - NBR, Nitrile, Perbunan, Buna-N

PU Polyurethane - PU, Polyurethane

SBR Styrene Butadiene - SBR, Buna-S, GRS

SI Polysiloxane - Silicone Rubber

XNBR Acrylonitrile Butadiene Carboxy Monomer - XNBR, Carboxylated Nitrile


(a!istics(ynthetic rubber is a

by.product obtained

from petroleum

industry

Important sources arestyrene, acetylene and

butadiene !wo of the

most important types

of synthetic rubbers

are butyl rubber and

styrene.butadiene

rubber


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CarbonBla

ck:enerally carbon blac% used in tyresand rubber product is produced by aprocess called furnace !yres andrubber products represent the ma$orend.use applications, accounting forabout /08 of global carbon blac%mar%et !he growth of carbon blac%is closely tied to the automotiveindustry and the production of tyres

Consumption of carbon blac% intyres is e&pected to grow at acompounded annual rate of +8!he virgin carbon blac% industry isli%ely to come under increasedpressure from governments andenvironmental groups, as thisproduct is a significant greenhousegas emitter emand for carbonblac% in paints, coatings and in%sare e&pected to show upward trend

eveloping economies in Asia

@acific, Diddle 4ast7Africa and ?atinAmerica will emerge as the largestand the most lucrative mar%ets in

the upcomingyearsIncreasing levelof disposablepersonalincome in theseregions ise&pected to

generatehealthy demandfor automobilesand other consumerapplications,translating intohigher demand

Asia.@acificrepresents thelargest mar%etfor carbon blac%in the world,

with a stronghold of 68share

(ilica and othersilanes aree&pected tooffer a seriouschallenge tocarbon blac% inthe future andare fastemerging as

ma$orsubstitutes to

carbon blac% due to better performance andenvironmental friendly nature !hese productsreduce rolling resistance in tyres at the same timeimprove fuel efficiency, hence they are increasinglyfinding usage in tyres mar%et

(teady demand from %ey end.user industriescontinues to provide sustainable business options

for active carbon blac% manufacturers :rowth inautomobile demand and the subsequent increase intyre manufacturing provide reasonable scope forincrease in volume consumption ith the globalautomobile industry moving east to China, India and4astern 4urope, the tyre industry has followed, andwith it the carbon blac% producers !he largemar%ets of China and India will post particularlyimpressive gains due to a continuing rapide&pansion in their respective motor vehicle and tyreindustries that will be driven by robust economicgrowth in both nations

There is a potential for much higher

growth for whole spectrum of rubber

industry in the domestic market due to

the fact that the current car penetration

level in India is just 7 cars per thousand.

The tyre industry accounts for about

65% of carbon black demand in India

followed by 15% in rubber products and

20% is utilized by ink, printing and other

speciality chemicals etc. Carbon black

helps in conducting heat away from the

tread and belt area of the tyre, reducing

thermal damage and increasing thedurability of the tyre.

Rubber-' . Rubber Industry (tatics


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!=4 R'4R "AR (a!istics

The Indian Rubber Board was constituted under the Rubber (Production and Marketing) Act, 1947. This act

was passed on the recommendation of an adhoc committee appointed by the Government of India in 1945

and it came into force on 19 April 1947. The Rubber Production and Marketing (Amendment)

Act of 1954 made certain changes in the constitution of the Board and amended its name as The

Rubber Board. This act came into force on 1st August 1955. The Rubber Act was further amended by

the Rubber Amendment Act 1960 which made certain alterations in the rate and procedure of collection

of cess on rubber. It was again amended by the Rubber (Amendment) Act 1982 to enable the Central

Government to appoint a part-time Chairman/whole time Chairman for the Board and an Executive

Director on whole time basis (if considered necessary by the Central Government) to exercise such

powers and perform such duties as may be prescribed or delegated to him by the chairman. This Act

came into force on 23rd October 1982.

The Chairman who is the administrative head of the Board, exercises control over all the nine departments.

Viz. Administration, Rubber Production, Research, Rubber Processing & Product Development, Statistics &

Planning, Finance & Accounts, Training, Market Promotion and Licensing & Excise duty. Publicity & Public

Relations, Planning, Internal Audit & Vigilance Divisions function directly under the Chairman.

The functions of the Board as defined under the Act are:

1. To promote by such measures as it thinks fit the development of the rubber industry.

2. Without prejudice to the generality of the foregoing provision the measures referred to therein may

provide for:

1) Undertaking, assisting or encouraging scientific, technological or economic research.

2) Training students in improved methods of planting, cultivation, manuring and spraying.

3) The supply of technical advice to rubber growers.4) Improving the marketing of rubber.

5) The collection of statistics from owners of estates, dealers and manufacturers.

6) Securing better working conditions and the provision and improvement of amenities and

incentives to workers.

7) Carrying out any other duties which may be vested with the Board as per rules made under this Act.

3. It shall also be the duty of the Board:

1) To advise the Central Government on all matters relating to the development of the rubber

industry, including the import and export of rubber.

2) To advise the Central Government with regard to participation in any international conference or

scheme relating to rubber.3) To submit to the Central Government and such other authorities as may be prescribed, half

yearly reports on its activities and the working of this act, and

4) To prepare and furnish such other reports relating to the rubber industry as may be required by

the Central Government from time to time.

CAPEXIL!he *Eth Darch 1/5E saw the emergence of an organi


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the cause of Indian e&ports of chemical based and allied products

!he prime ob$ective of Cape&il is to offer value added services to its member e&porters and to promote

their products in the international mar%ets Cape&il has always lent its creative resources for e&port

promotion strategies !hese strategies include mar%et research, participation in trade fairs and buyers

seller meets, procurement of databases and trade information, publicity drives etc

CA@4GI? acts as Heyes F ears# of the :overnment in matters of e&port of the concerned industries and

thus, contributes to the formulation of national e&port policiesRubber-' . Rubber Industry (tatics


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Performance of Rubber Industry 201112The global economic slowdown had affected the

Indian economy and Indian economy witnessed a

swift recovery. The impact of global slowdown was

more intense on industry, particularly themanufacturing sector. The fiscal and monetary

policy interventions, however, provided the stimulus

to the economy, leading to a recovery in the GDP

growth in 2011-12.

During 2011-12 period, Indian economy grew by 6.5%,

mainly due to poor performance of the manufacturing

sector, as against 7.8% in the previous fiscal. However,

economic growth, as measured by the Gross Domestic

Product (GDP), decreased to 7.8% in 2011-12 from

8% in 2009-10 due to slowdown in farm output and

construction activities and financial services

performance.

The growth of manufacturing sector was fairly

aligned with the overall growth of industry and as

a dominant sector; it chartered the growth of

overall industry. Indias manufacturing sector

growth during year stood at 5.1%, which is one-

third of Chinas factory output of 15% and also

lower than the world average of 6.5%, accordingto a UN report.

The IIP groups the industry into three broad

sectors like mining, manufacturing and electricity.

The performance of these three sectors indicates

that the mining sector have been able to maintain

the growth at about trend rates. The rate of

growth


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wheelers were 76%, 15%, 4.5% and million tonnes as against 14.1 million

4.5% respectively. The growth rate tonnes in 2010.

recorded for domestic sales for 2011-12

was 12.24% amounting to 17,376,624 Global natural rubber consumption

vehicles. increased to 10.92 million tonnes in

The auto tyre sector registered a growth2011 registering a growth of 1.4%compared to 10.78 million tonnes in

of 3.7% as against 13.4% achieved 2010 due to low demand for vehicles

during 2010-11. The general rubber and tyres. Global synthetic rubbergoods sector recorded a negative growth consumption increased to 14.93

of 1.2% during 2011-12 compared to a million tonnes during 2011 from

negative growth of 1.2% registered during 14.09 million tonnes during 2010,

the previous year. According to the recording a growth of 6.0%. World

Automotive Tyre Manufacturers NR and SR consumption ratio during

Association, the average growth in tyre 2011 was 42:58.production during the year 2011-12 was22% compared to 13.4% in 2010-11. The Indian (cenario

truck & bus tyre production registered a Natural Rubber Production

growth of 3% during 2011-12 compared Production of natural rubber in India

to 3% achieved during 2010-11. The during 2011-12 was 903,700 tonnes

production passenger car tyre compared to 861,950 tonnes during

segments recorded 31% growth in 2011- 2010-11 and recorded a growth of 4.8%

12 as against 31% attained during 2010- compared to the previous year. Theproductivity

duringCA!4:"R.5I(4 @R"'C!I"9 "; !R4( F !'14( 2011-12 increased to

(Qty in 000 numbers) Tyres Tubes1841 kg/ha from 1806Products 2011-12* 2010-11 2011-12* 2010-11kg/ha during 2010-11.

Truck & Bus 160857 15668 15404 14990The factors attributedTractor 5667 5423 2149 2006to the growth inCar 27141 26201 8363 9127

production wereJeep 1595 1500 1857 1746

favourable weatherLCV 6688 6029 5417 5232

Motor Cycles 44857 43118 45092 43156conditions and

Scooter+ 22195 20140 17177 16321intensive harvestingA.D.V 293 311 166 198due to attractive price.

OTR 196 191 112 97

Industrial 681 616 100 74Natural rubber

Total 125398 119197 95837 92947Consumption

*: provisional, +including Moped The consumption of(Source: Automotive Tyre Manufacturers Association) natural rubber in

of manufacturing also improved

considerably in the last two

years and has been in double

digit. Electricity sector however,have grown more at the trends

rates.

The Automotive production data for

2011-12 shows a production growth

of 13.83% over previous year. The

industry produced 20,366,432

million vehicles of which share of

two wheelers, passenger vehicles,

commercial

vehicles

and three

11. Export of tyres alsoincreased by

22% even though truck

& bus tyre exports

declined by 2%.

orld Rubber(cenario

According to the

International Rubber

Study Group (IRSG),

the world natural rubber

production increased by

5.5% to 10.97 million

tonnes in

2011,

compared

to a growth

of 7.3%

during

2010.

Global

synthetic

rubber

production

during

2011

registered

a growth

of 7.3 % to

15.1

2011-12

was

964,415

tonnes

with a

growth of

1.76% as

against

947,715

tonnes

during

2010-11.

Consu


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mption of Natural Rubber


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(Qty in Tonnes) 2010-11 2011-12Gr %

Tyres & Tubes 597623 631410 5.7

General Goods 350092 333005 -4.9

Total NR 947715 9644151.76

Rubber- ' . Rubber Industry (tatics

Import & Export of NRAs per the statistics published by

the Directorate General of

Commercial Intelligence &

Statistics (DGCI&S), India has

imported 205,433 tonnes of

natural rubber during 2011-12

against the import of 190,674

tonnes during 2010-11.

Exporters have utilized the

advantage of price differential

between domestic and international

price during the initial and terminal

months and exported 27,145

tonnes of natural rubber during

2011-12 compared to 29,851

tonnes exported during the

previous year.

The stock of natural rubber as on

31st March 2012 was at 236,275

tonnes.

Synthetic Rubber Production

The Synthetic rubber production

increased to 110,599 tonnes

during 2011-12 from 110,340

tonnes recorded during 2010-11,

registering a growth of 0.2% as

against a growth of 3.4% during

2010-11.

Synthetic Rubber

Consumption

Synthetic rubber consumption

increased

to 423,350 tonnes during 2011-12

registering a growth of 2.8% as

against 411,830 tonnes consumed

during 2010-11. The automotive tyre

sector consumed 307,365 tonnes of

synthetic rubber during 2011-12 as

against 298,414 tonnes during 2010-

11, recording a growth of 3%. The

consumption ratio of natural and

synthetic rubber in India changed to

69:31 during 2011-12 from 70:30

during 2010-11.

Consumption of Synthetic

Rubber

(Qty in Tonnes) 2010-11 2011-12 Gr%

Tyres & Tubes 298414 307365

General Goods113416 115985

Total SR 411830 423350

Consumption of NR & SR(Qty in Tonnes) 2010-11 2011-12Gr%

Tyres & Tubes 896037 938775

General Goods 463508 448990

Total NR & SR 1359545 1387765

Import & Export of SR

Import of synthetic rubber by the

user industry during 2011-12

increased to 327,625 tonnes

compared to 302,030 tonnes

during 2010-11.

Indian

Rubber Industry

(a!isticsPrice of Natural Rubber

During the year 2011-12, natural

rubber prices in the domestic and

international markets have been

ruling high. The surge in price was

due to tight supply, rise in crude oil

price, climatic factors, currency

movements, futures market

movements etc. Annual average

price for domestic RSS-4 grade

rubber for the year 2011-12 was Rs

208.05 per kg compared to

Rs.190.03 per kg in 2010-11.

The average international price for

RSS-3 grade was Rs.209.15 per kg

for the year 2011-12 and for the year

2010-11 the average price was

Rs.195.55 per kg.

;orecast

According to Rubber Board, the

production of natural rubber for the year

2012-13 is projected at 9.42 lakh

tonnes with a growth rate of 4.2% and

the projected consumption for the year

2012-13 is 10.06 lakh tonnes with a

growth of 4.4%.

Society of Indian AutomotiveManufacturers has forecasted the sales

growth of11-13%for the fiscal 2012-

13.


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ESTIMATEDPRODUCTI

ON OF KEY

INDUSTRIES

IN THE

NON-SSI SECTOR

ITEM GROUPS

Adhesives

Auto Ancillary & Parts

BicyclesCable, Rubber Insulated

Carbon Black

Commerical Vehicles

Complete Tractors

Condoms

Fatty Acid

Hose Pipe

Motor Cycles

Passenger Cars

Rubber Chemical

Rubber Flaps

Rubber Transmission & V BeltsRs.Crore

Rubber Tread

ITEM GROUPS ACOUNTING

Scooter and Mopeds Numbers

Sports Goods, Rubber Th. Numbers

Synthetic Resins

Synthetic RubberThree-Wheelers Numbers

Tube, Cycle/Rickshaw

Tube, Truck

Tyre, Car/Cab

Tyre, Cycle/Rickshaw

Tyre, Jeep (Incl. Suv, Muv)

Tyre, Motor Cycle

Tyre, Tractor Front

Tyre, Tractor, Rear

Tyre, Tractor, Trailer

Tyre, Truck/Bus

Utility/Multi-Purpose Vehicl

NOTE: Figures likely

to undergo change

based on factual

reporting.

Rubber- ' . Rubber Industry (tatics

About the Industry - An Overview

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